Minimum hourly wages for many nonexempt employees and minimum salaries for exempt employees in New York, New Jersey and Connecticut are scheduled to increase in 2023. Employers should begin to make plans to ensure that their hourly wages for nonexempt employees, their minimum salaries for exempt employees and their wage hour policies and practices comply with these requirements.
On January 1, 2023, the minimum hourly rate in New York City, Nassau County, Suffolk County and Westchester County for nonexempt employees is $15 an hour. The minimum hourly rate for nonexempt employees located in other New York regions increases from $13.20 to $14.20 an hour on January 1, 2023 and is subject to annual increases each year thereafter based on economic indices until it reaches $15 an hour for employees in those geographic areas. These effective minimum hourly rates apply to nonexempt employees regardless of whether these workers are paid an hourly wage or a weekly salary.
The minimum salary for exempt employees in New York City, Long Island and Westchester is $58,500 per year on January 1, 2023. The minimum salary for employees who are exempt from overtime pay requirements increases from $990 per week to $1,064.25 per week for other regions in New York State. Employees exempt from overtime pay requirements based on the professional exemption, such as doctors, lawyers and teachers, may not be subject to the same minimum salary requirements as other exempt employees.
New York State allows employers in certain industries to satisfy the minimum wage by combining a cash wage paid by the employer plus a credit for tips the employee receives from customers. The minimum hourly rates New York employers must pay most tipped employees are as follows:
From December 31, 2022, through December 30, 2023, these are the minimum hourly rates that employers must pay to tipped workers:
|New York City||Long Island and
|Remainder of NYS|
|Service Employees||$12.50 Cash Wage
$2.50 Tip Credit
|$12.50 Cash Wage
$2.50 Tip Credit
|$11.85 Cash Wage
$2.35 Tip Credit
|Food Service Workers||$10 Cash Wage
$5 Tip Credit
|$10 Cash Wage
$5 Tip Credit
|$9.45 Cash Wage
$4.75 Tip Credit
There are also limitations for tip credits in certain industries, as well as federal regulation regarding tips and tip pools for certain employees and employers.
In addition, there are separate wage orders in New York and increased minimum compensation requirements for employees in certain industries, such as fast food and building services. For example, the minimum wage for employees working for fast-food chains is $15 an hour. Additionally, the New York Wage Order for building service employees and federal regulations regulate credits for lodging and meals which employers provide for employees. Further, New York City is proposing a new minimum pay rate of $17.87 per hour for app-based restaurant delivery workers which would increase in three years to $24 per hour. This proposal is scheduled for a public hearing on December 16, 2022.
The minimum wage schedule for home care workers in New York increased on October 1, 2022 to $17 per hour in New York City, Long Island and Westchester and $15.20 per hour for employees in all other regions in New York State. However, on January 1, 2023, the minimum wage in those other areas in New York increases to $15.90 per hour.
The New Jersey hourly minimum hourly wage rate also increases on January 1, 2023 for most New Jersey employers. The hourly rate in New Jersey increases by $1.13 to $14.13. The minimum hourly rate for seasonal and small employers (fewer than 6 employees) in New Jersey increases by $1.03 to $12.93 per hour on January 1, 2023. The piece rate or regular hourly rate for agricultural workers on farms increases to $12.01 on January 1, 2023; while for long-term care facility staff, the minimum hourly rate increases by $1.13 to $17.13 per hour in 2023. The New Jersey hourly rate for tipped employees increases to $15.26 per hour on January 1, 2023 with a tip credit of $8.87. Future minimum wage increases in New Jersey for 2024 and future years will be raised automatically based on increases in the Consumer Price Index.
The New Jersey minimum salary for exempt employees is the same as the federal minimum salary which is currently $35,568 or $684 per week.
Connecticut’s minimum hourly rates increased to $14.00 per hour on July 1, 2022 and will go up to $15 an hour on June 1, 2023. Commencing in January 2024, minimum wage rate increases in Connecticut will automatically be raised based on the computation of certain employment cost indexes.
Connecticut currently utilizes the same minimum threshold salary for exempt employees as federal law.
Federal minimum wage and minimum salary requirements for exempt employees are substantially less than many state and city minimum wage requirements. However, those minimum wages and salaries are likely to increase in 2023, and the U.S. Department of Labor under the Biden Administration is proposing new wage hour regulations for 2023 which are likely to be released shortly. Additionally, wage hour regulations and laws may also be applicable under federal law.
Employers should review their compensation for employees and wage hour policies to ensure that they comply with these required wage increases based on the location of the employees and the industry in which they are employed.
As a result of labor shortages, inflation increases and other issues, employers will also likely be subject to renewed demands for wage increases from new and existing employees substantially above those minimums. Employers should also review and update their compensation, wage hour and work policies and agreements in 2023 for employees subject to union collective bargaining agreements, employment agreements, prevailing wage contracts, and classifications of individual workers in 2023.
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